Pay, perks super for schools chiefs

Published in the Asbury Park Press 09/4/05

BY BILL BOWMAN
AND PAUL D'AMBROSIO
STAFF WRITERS

Lucrative perks, a guaranteed raise and the "buy-back" of unused sick and vacation time this year will add more than $100,000 to the salary of the Long Branch school superintendent, who oversees 4,800 pupils. His total compensation will top $300,000.

In Cherry Hill, its school superintendent turned down a $20,000 performance bonus but won a much bigger payout through a clause in his contract: $40,000 for a retirement annuity or "other investment vehicle."

In the Freehold Regional High School District, its superintendent gets a 2005 Chrysler Pacifica SUV — including insurance — from the school district to use for school business and private trips.

In districts around the state, it is not uncommon for boards of education to grant tens of thousands of dollars in extra pay to their chief administrators through complex contract deals that keep the true cost of compensation from the taxpayers.

Generous benefits packages include free use of district cars or lucrative car allowances, thousands of dollars in tax-deferred annuities and money for unused vacation and sick days.

These individualized and negotiated contracts come at a time when rising public salaries and additional compensation put pressure on already strained taxpayers.

Rapid rise in pay

Overall, New Jersey's 570 school superintendents have done well at the bargaining table during the last four years. Collectively, they saw a salary increase of 13.5 percent from 2001 to 2004 that has taken their average base salary from $121,416 to $137,813. Monmouth County's 2004 average was $140,399, and Ocean County's was $137,116.

New Jersey has more school districts than Virginia, Maryland and Delaware combined. The cost to New Jersey taxpayers was $77 million last year to pay for the superintendents' base salaries, up from $69 million in 2001.

And that is before all the perks are added in, which vary greatly from district to district, a Gannett New Jersey investigation has found.

Gregg Edwards, president of the conservative Center for Policy Research of New Jersey, said there's "no good way of monitoring this sort of stuff. It encourages outlandish abuse."

Highly paid superintendents and the boards of education that grant them the contracts liken their school districts to a multimillion-dollar business that needs to pay its CEO private industry-level salaries to remain at the helm.

They note the superintendents are always on call and bring in tens of millions of dollars in state and federal aid each year to ease the pressure on local property taxpayers.

But not all school districts offer the sky to their top officials.

Pay tied to results

In the 17,000-student Camden school district, its superintendent is assured little beyond her base salary of $185,483.

If Superintendent Annette D. Knox, 59, wants to win a 10 percent performance bonus, she has to find a way for more students to pass standardized state tests and to increase the graduation rate in one of the lowest-income cities in the state.

But in Long Branch, the local board of education has approved perks and automatic 5 percent raises for Superintendent Joseph M. Ferraina, 55, one of the highest-paid superintendents in the state.

Beyond his base salary of $201,756, Ferraina will receive:

$78,461. The district this year paid him for 80 unused sick days and 18 unused vacation days at his $801 per-diem rate. Like all educators, Ferraina is able to bank unused sick time; he gets 15 days per year. He still has about 200 sick days left, worth an estimated $165,000.

Even though he doesn't take all of his allotted vacation time, the board this March granted him five extra vacation days, for a total of 30 per year.

When the board renewed Ferraina's contract, it provided a boost in how much it would pay for unused sick days. In 2000, his contract then called for him to be paid for 75 percent of his accumulated sick days at 50 percent per diem on retirement. In 2000, that amounted to about $62,000.

$9,000, or $750 a month, as a personal car allowance, and up to $16,000 toward the purchase of life, long-term care and disability insurance.

$12,105 for a retirement tax shelter, which is in addition to the standard teacher's pension all superintendents are guaranteed.

The extras add about 55 percent to Ferraina's base salary, bringing his total maximum compensation for 2005 to about $317,000.

In contrast, New Jersey's governor is paid $175,000 a year, and the U.S. secretary of education has a salary of $175,700.

Defending his value

Ferraina's pay is worth every penny, said Long Branch school board member William Knox.

"I think he's doing an excellent job," said Knox, who is not related to Camden Superintendent Annette Knox. "When Ferraina became superintendent, the only way he could go was up. He's done a lot to bring the district back."

It's compensation packages like Ferraina's that lead Angelo Digiovanni, 85, of Dover Township, to believe that all superintendents are overpaid.

"Every single one of them," he said. "I believe we have too many superintendents of schools in the state."

Ferraina, like other schools superintendents interviewed for this report, said he is fairly paid.

"I have a job to do, and I think I do a fantastic job," Ferraina said. "I don't apologize for what I make. I feel I put a lot into it."

Ferraina pointed out that he has saved the district millions of dollars in renegotiated contracts and also has brought in millions more in state money for school construction.

He said he has spent many "sleepless nights" over the course of his tenure as superintendent.

The school board even named its preschool after him, the Joseph M. Ferraina Early Childhood Learning Center.

"That preschool is one of the best in the state," Knox said. "Many school districts in the state and other places are modeling theirs after ours."

Although proponents say that the modern-day schools chief is more akin to the chief executive officer of a major corporation than a public servant, and his salary and benefits should reflect that, critics contend that the multilevel benefits packages can lead to abuses.

CEOs, but no "product"

Edwards, head of the Center for Policy Research, said superintendents have the best of both worlds. They get paid for unused vacation and sick days, and are assured a comfortable pension on retirement, both of which are rarities in private industry. And the superintendents receive compensations that equal those of large businesses, said Edwards, who is a former Hamilton Township Board of Education member.

"If they are looking for more money, it should be tied to their performance," he said. "What I object to is people saying this is a business, but you can't measure our performance because these are (students), not products. I just don't buy that."

Large districts such as Trenton and Camden tie bonuses and raises to student test results, a measure of performance that should be applied in all districts, he said.

Middletown resident James Cody, 46, a former school board candidate, takes his displeasure with the pay scale a step further.

"My whole big thing is to get rid of superintendents with these big (benefit) packages," he said. "Let the county superintendents run our districts; keep the assistant superintendents in the district to do the day-to-day" oversight. "The assistant superintendents are doing a good job without the big packages, and they're getting paid a decent salary."

Gannett New Jersey's review of superintendent salaries and standardized state test results shows there is no relationship between how much superintendents get paid and how well students do on the tests in their districts.

Wide variations

Most salaries are based on the size of the district and age of the superintendent — the larger the district, the higher the salary, in most cases.

In Freehold Regional, one of the largest districts in the state with 10,700 high school students, Superintendent H. James Wasser's base salary of $181,000 is complemented by a board-leased vehicle, a 2005 Pacifica SUV.

The board pays all costs for the SUV and even allows him to drive it for nonwork-related trips. All personal use has to be reported as additional compensation to the Internal Revenue Service, according to his contract.

Not all superintendents are paid fabulous salaries, though. Of the 79 superintendents in Monmouth and Ocean counties, 19 were paid less than $120,000 a year, mostly in single-school districts.

Locally, it cost $3.4 million for the salaries in Ocean County, and $7.4 million in Monmouth County.

Many of the contracts reviewed showed that automatic raises of 3 percent to 6.5 percent were built into the multiyear deals, with few offering incentives to improve student performances.

Some boards mixed performance with perks.

In Cherry Hill, Superintendent Morton Sherman — who will receive $40,000 for an annuity on top of his $169,000 salary — turned down a $20,000 bonus after the school budget was rejected by voters. He asked the board to instead put the money toward programs for minority students' achievement and character education in the 11,500-pupil district.

Other districts with full or partial performance incentives include: the Chathams and Morris School District in Morris County; Point Pleasant Beach in Ocean County; and Hillsborough, Bernards, Bridgewater-Raritan and Montgomery in Somerset County.

The top of the list

In 2001 — the last time Gannett New Jersey examined superintendent salaries — and again in 2004, the Long Branch and Toms River Regional districts had the highest-paid superintendents.

Long Branch's Ferraina enjoyed an 18.7 percent base salary increase, from $162,715 in 2001 to $193,149 in 2004. At Toms River Regional, Michael J. Ritacco's salary increased 8 percent, from $194,078 in 2001 to $209,551 in 2004. Toms River Regional has more than 18,000 students.

By comparison, Paul G. Vallas, the chief executive officer of the Philadelphia school district, earns a base salary of $225,000 a year. Vallas is responsible for 270 schools and 185,000 children.

In Fairfax County, Va. — the district that consistently earns the highest standardized test scores in the nation — schools Superintendent Jack Dale is paid a base salary of $251,457. That district has more than 200 schools and 166,000 students.

The reason for the ballooning salaries in New Jersey may be the result of actions taken in the early 1990s to eliminate tenure for superintendents, experts say.

Barry Galasso, executive director of the New Jersey Association of School Administrators, said the abolition of tenure has resulted in a smaller pool of qualified candidates. Tenured principals may not want to risk losing their career security for a job that could end in three years if their contract is not renewed.

That has created "a fair market value that is negotiated between individual superintendents and their boards, either to retain them or hire them away from someplace else," he said. The association is a professional group for superintendents and administrators.

"I guess the question is, what would a person who ran a $40 million, $60 million or $100 million organization command in the private sector?" he said. "I believe that superintendents are compensated to the level that communities want them compensated."

Shrinking pool

David Hespe, former commissioner of the state Department of Education and currently an associate professor in the department of educational leadership at Rowan University in Glassboro, said the pool of potential superintendents — usually high-level administrators such as principals — is also shrinking.

"I know a that a lot of people who have the certification to be principals are saying to themselves, "I'm making almost as much as a principal being a teacher, so why would I want to take on the additional burdens for a little increase in pay?' "

Ritacco, 57, has been the Toms River Regional schools superintendent for 14 years, and was assistant superintendent for 12 years prior. His current base salary of $210,751 is boosted nearly 40 percent by a benefits package that includes a $10,000 contribution to a tax-deferred annuity, a district-supplied car, buyback of up to 30 vacation days and 50 sick days at his per-day rate — now at $873 — and fully paid health insurance in retirement. The buybacks can add up to $69,840 to his income.

Ritacco, who is also the district's business administrator and acts as the schools superintendent for the Seaside Heights district, said very little in his contract has changed since he assumed his position.

"The only thing that has changed has been the percentage (salary increase)," he said. "That's gone up about 3 percent a year."

Ritacco is assured a raise of 3 percent plus $10,000 each year, under the contract. His total maximum compensation for this year could hit $290,000.

"To my knowledge (the perks he receives) have existed prior to me being here," he said.

Ritacco said it's only proper that jobs like his with a high level of responsibility be fairly compensated.

"When you're overseeing a close to $200 million budget each year, 18,700 children, it's a large job with a lot of responsibility," he said. "I think contracts should be commensurate with the responsibility."

Ritacco said he and the school board have "never really looked at" tying his salary increases to increased student performance. One reason for that, he said, is that the superintendent is part of a team.

"A superintendent's most important job is to hire the right people for the classrooms, for the supervisory jobs," he said.